This is the second post in the series inspired by an AdExchanger comic prognosticating on which technology/concept will emerge as the clear winner in 2011. The first post in the series can be found here.
I’ll admit it. A real time bidded marketplace has intrigued me for some time. Efficiency is something that I hold close to my heart (and sadly I take it to an extreme in many ways) and what can be more efficient than doing things in real time? I would love nothing more if not just media, but any transactions that happened in the online advertising space happened in real time and in fact I think the industry made some significant strides in 2010 in moving in the right direction*.
That being said, many challenges remain:
At the end of all of that I’m still optimistic. There are some very hard problems to solve, but they are being worked on by some very smart people. Part of the challenge is going to come not from the lack of solutions, but from a marketplace that is going to adopt any changes to their marketplace with hesitation. In the end I think the industry as a whole will look back at the environment that existed prior to things being done in real time and be amused by how quaint it all was. I’m just hoping that day is sooner rather than later.
*Note: I’m mostly going to focus on the media transaction aspect of real time in this post and specifically to spot marketplaces. This is primarily because that is where we are right now. I’ d love to look at the futures marketplace (aka guaranteed/premium) and spend more time talking about all of the other great things that can be done in real time, but I’ll save it for another time.
AdExchanger recently posted a comic that illustrates the 2011 online advertising crystal ball. The same thing could have been easily drawn as a buzzword bingo card. Many of these same areas have been touted for years to be the technology/channel that would be the break out success story in the online advertising landscape. To be clear all of these area’s have made significant strides, but has any of them really been a game changer? Will any of them live up to their full potential in 2011?
Over a series of posts, I’m going to look at each of these and try to figure out what area is really going to own 2011.
I feel like we’ve been talking about mobile for decades. Realistically it has only been a handful of years. A cursory search pulls up articles from 2008, 2009, and 2010. To be fair it is really two different things that people are talking about when discussing mobile and the second is largely dependent on the first.
As I sit here at a family Thanksgiving surrounded by what I’ll describe as a group of late adopters, I feel safe in saying that the adoption portion of the discussion has happened. In fact Nielsen has declared that US smartphone penetration will cross 50% in 2011.
I’ve been less than impressed with the 2nd piece of the mobile puzzle and I really don’t know why. It isn’t that mobile advertising isn’t making any money. In 2009 the US mobile advertising market was estimated to be $416 million with that growing to $593 million in 2010. That being said, I can’t remember the last time I saw a mobile online advertising experience that was even the least bit engaging to me. Usually when I say things like that people try to argue that because I’m immersed in the industry I’m blind to most of the ads that I see on a day to day basis. I would argue the complete opposite. I’m intrigued by what agencies, advertisers, and publishers are doing to engage their audience with their message. I pay very close attention to the trends. Up to this point I’ve seen nothing on mobile that, if I were spending my marketing dollars, I’d want to buy. So why is the market growing so fast? Well first, it is because the market penetration is growing. More eyeballs will always equal more dollars. The dollars are flowing in at a quicker clip than the eyeballs, so there is something else at play. Largely I think this is attributable to the marketings buying the buzz. How many times have you heard at a conference that Mobile is the next big thing? That messaging has an impact. That being said, I feel like the mobile advertising industry will really need to innovate to experience the renaissance everyone talks about.
That innovation may really be dependent on the application landscape instead of finding new ways to get traditional creatives into a mobile experience. Search is search is search. While there are some things that make search on mobile device more engaging, like tailoring results to a specific location or to content that can be easily consumed on a mobile device, I don’t see much in the way of innovation that will happen here. Display is dead to me. There just isn’t enough real estate to have an engaging display ad on a mobile device. It does have advantages to mobile publishers in that it is easy to implement and easy for their sales force to sell, but I just don’t see how you make ad units that small a compelling play for any kind of marketer, brand or direct response. I would love someone to prove me wrong on this point. So where does the innovation come from? I think the best chance to get an engaging form of advertising in the mobile space is to embed it directly into the mobile applications. We’ve seen the beginnings of this with things like Foursquare deals and GroupOn mobile, but I think there are much more interesting things to come.
Unfortunately, in order for the marketers to start spending a large share of wallet for in-app advertising, one thing will first have to happen. Adoption. So while we’ve seen adoption of smartphones in general, we may be a couple of more years off before we start to see who is going to break away from the pack in terms of application developers. Until that happens, and those developers start to innovate, I’m predicting the year of mobile advertising is still a ways in the distance.